Discovering the Calibrated Curves
Figure 9.1, a daily bars chart of the NASDAQ Composite Index, shows the first three standard resistance curves in the hierarchy of resistance curves that starts from the high on August 15, 2008. The topmost curve, number 1, behaves beautifully, capturing both the close-in price retracements, plus the first major high after the launch. However, the second curve floats far above the next high after its launch point, while the third curve dives way below the two succeeding major highs.
Let's try launching a new curve somewhere after the start of number 2 at a place such that this new curve does catch the third high, the high from which number 3 is launched, a place I'm calling the Calibration Point. Figure 9.2